The fate of 165 jobs in the city of Duluth hang on a legal decision by a St. Louis County District Court judge.

City Worker union AFSCME has filed suit trying to block the layoffs of 165 city workers.

The staff reductions were made as part of Duluth Mayor Don Ness' plan to plug a $6.5 million budget hole.

The Union filed the suit on Friday.

The Duluth city workers had been told to expect layoffs beginning tomorrow.

But now A.F.S.C.M.E. Local 66 has asked the district court to block that from happening, claiming its an illegal move on the city administration's part.

One city councilor says whatever the outcome of the court battle, however, no one will win.

"The court is the absolute worst place to bring a labor dispute because with the court somebody wins and somebody loses and in this case if the city were to lose, that's really the taxpayers," said Jim Stauber, Duluth City Councilor at large.

In the lawsuit AFSCME leaders say the city isn't abiding by its union contract.

"They're laying off full-time employees but they're keeping temporary employees employed and we have a contract and we have a court order that says they can not do that," said Alan Netfield, President of AFL-CIO Central Labor Body.

And herein lies the dispute... the definition of temporary and permanent employees.

AFSCME officials say under the terms of the agreement, all employees working fewer than 14 - hours a week must be let go before any full time employees can be laid off.

Duluth City Councilor Jim Stauber says although some people work fewer than 14 hours a week, they're still considered 'permanent' employees.

"It would be much better if negotiations and mediation could occur outside of the courtroom but it looks like come tomorrow morning it's going to be in the court," Stauber said.

If a judge does rule in favor of AFSCME, no city employee may be laid off until the city and AFSCME come to an agreement.

Stauber says this is unfortunate because it could take weeks or months to reach an agreement... and there are only a few months left to balance the budget.

He expects the city could suffer far worse losses than city lay-offs.

AFSCME leaders are very hopeful the court will rule in their favor.